User talk:Scarlett Aung/sandbox

 Nike, Inc Global Supply Chain Sustainability 

Nike, Inc. is an American multinational corporation that designs, develops, produces, distributes, and sells apparel, footwear, equipment, and services on a global scale. The company's global headquarters are located in the Portland metro area, close to Beaverton, Oregon (USA). It is a significant manufacturer of sporting goods and among the biggest providers of athletic footwear and gear worldwide (Nike Inc,2022). The brand alone was valued at $19 billion (€17,5 billion) in 2014, making it the most valuable brand among sports firms. It employs more than 44,000 people globally. Nike markets its goods in addition to its own brand under the names Nike Pro, Nike+, Nike Golf, Nike Blazers, Air Jordan, Air Max, and other as well as subsidiaries like brands Jordan, Hurley International, and Converse (Greogry,2016).

As one of the most recognizable sports brands in the world, Nike, a multinational company, is unquestionably the most significant player in the contemporary textile industry. Every year, Nike sells hundreds of millions of shoes and other products, and a remarkably comprehensive supply chain is what makes this possible (Statista,2022). In the recent years, Nike has made a number of significant adjustments to its corporate operations and supply chain strategy. The sports shoe and apparel brand has seen an increase in sales and revenue as a result of these adjustments. The company has developed an excellent supply chain strategy that guarantees high quality standards, more availability, and prompt delivery at affordable prices (Abdulla, 2022).

Impact of Globalization On Supply Chain
Globalization has also had a significant impact on the logistics and supply chain of Nike. The supply chain is the most crucial logistical concept. The management of supply chain operations has gotten increasingly difficult with the development of globalization. SCM is a crucial component of the majority of Nike and is crucial to both corporate success and consumer experience. The pathways between suppliers and consumers are represented by supply chains. The purpose of the supply chain is to guarantee that a product gets from its conception into the hands of the consumer (Silver, 2021). These goods need to go across international boundaries in order to reach as many markets as feasible. Supply chains are crucial for global markets because without them, suppliers' products could not reach global markets in an effective manner.

The advantages of a global supply chain for Nike include increased mobility of its production aspects, which enable Nike to move production to regions with cheaper labor costs. Nike outsources production to companies like Saga Sports in Sialkot, Pakistan, rather than operating its own manufacturing operations (Rammohan, 2021). It becomes more challenging for Nike to supervise its production activities as it works to guarantee that quality standards are maintained and applicable U.S. labor regulations are obeyed, which is one of the risks of having a worldwide supply chain. Moreover, natural disasters and logistical mishaps have a greater potential to have an impact on the global supply chain.

Principles of Nike Supply Chain
Outsourcing and diversification are the main driving concepts of Nike's supply chain. Nike outsources all of the production of its shoes and clothing to independent partners (Adamek, 2022). It was one of the first global corporations to use this strategy. Nike's supply chain team swiftly mastered the increased logistical complexity brought on by this outsourcing due to efficient management, and as a result, it has achieved significant cost reductions over time. Although outsourcing is incredibly risky, Nike was able to substantially reduce this risk from the start by greatly diversifying its supplier base. Its supply network has developed from these concepts into one of the most efficient and responsible large worldwide supply chains due to dedicated and experienced management.

Three fundamental organizational concepts underlie how Nike's supply chain operates:


 * Outsourcing: to save costs
 * Diversification: reduce risks
 * Corporate social responsibility: to manage its impact on the environment it works in.

Nike Innovates Supply Chain For Sustainability
Many people believe Nike to be one of the most innovative firms in the world. Although Nike's innovation is readily apparent in its products and marketing, in recent years, Nike's biggest innovation may have been in an aspect of the company that the majority of customers ignore: its commitment to sustainability in its supply chain (Garcia,2021).

Over the past decade, Nike has made a number of remarkable efforts to lessen its environmental impact in response to the ongoing effects of its operating model. In fact, in 2015, Nike achieved the highest rating among all footwear and apparel businesses in Morgan Stanley's Annual Sustainability Index. Nike's environmental initiatives, to highlight, include:

71% of Nike's shoe and apparel products contain recycled materials.
 * Raw Materials
 *  Manufacturing

Since 2008, the energy used by Nike's contract manufacturers has decreased by half per unit, which means that the energy and emissions required to produce a pair of sneakers today have decreased by nearly half (Aboelmaged,2018)

Just in 2015, 54 million pounds of manufacturing scrap were converted into premium materials for Nike garments and footwear.


 *  Distribution

Nike has already integrated on-site renewable energy generation at several of its major locations, with the goal of using 100% renewable energy in its owned and operated facilities by the year 2025(Mazar,2015).


 *  End Consumer

An estimated 30 million pairs of shoes have been recycled under Nike's "Reuse a Shoe" campaign (which among other things are used to create new running tracks)

Nike has integrated sustainability as a strategy into contemporary advancements, moving it beyond its supply chain. For instance, Nike's Flyknit sneakers are knitted together in one piece from an unique yarn (rather than stitching together multiple pieces of a traditional running shoe). As comparison to a regular running shoe, this method produces a lighter-weight, higher-performing shoe while using 60% less fabric waste. Also, Nike used recycled water bottles to create its soccer uniforms for Euro Cup. (Ottman, 2021)

Blockchain Technology And Nike
In the sports wear sector, Nike has long been a pioneer of digital development. E-commerce, technology for the in-store customer experience, and artificial intelligence have long been part of the brand's strategy. Most recently, it has made an effort to capitalize on interest in cutting-edge concepts like the Metaverse, NFTs, and web3. In order to self-adapt to blockchain technology, Nike has changed its strategy. Nike investigated blockchain technology after seeing its potential to solve some of the issues the corporation was having (Hagi, 2022).

Nike has recently started using RFID blockchain technology to measure global inventory levels so they can see how the supply chain is operating in real time. Artificial intelligence and predictive analysis are also utilized to track consumer demand following the acquisition of Celect in 2019 (Ledger, 2020).

Nike is aiming to use blockchain technology into supply chain management. There have been cases where customers have received fake Nike merchandise, as recognized by Nike. Nike decides to use blockchain technology after considering all the recent incidents.

Nike's LSCM For Competitive Advantages
The following are the core practices and strategies of Nike in creating competitive advantages derived from logistics and supply chain management.

Inventory Management
Nike's inventory management system was dependent on long-term projections of the future. If orders are placed six months in advance, Nike rewards retailers. Nike estimated global demand using the sales and order information from these merchants, and then utilized that estimate to determine the volume of production at various factories across the world (Guo et.al, 2019).

Lean Manufacturing
Nike's competitive advantage comes from lean manufacturing, which enhances the effectiveness, minimizes waste, saves overhead costs, and enhances production. 85% of Nike's footwear is distributed on lean manufacturing lines, saving the corporation $0.15 per unit compared to a typical distribution approach (Steven, 2012).

New Regional Service Center
Nike is attempting to expand capacity, speed, and accuracy more sustainably by building additional regional service centers. Nike benefits from the change by being able to provide products to clients more swiftly and efficiently, which will also minimize its impact on the environment (Ciment,2022).

Automation And Technology
One of the most well-known brands in the world, Nike is also a pioneer in supply chain and automation technology. Nike's supply chain is now almost entirely automated, which has allowed them to significantly reduce costs and boost productivity. Nike started investing in new technology in the early 2000s, which was the beginning of their journey toward an automated supply chain. Recently, Nike has also put more than 1,000 "cobots" (collaborative robots) to operate at distribution centers to help with inventory sorting, packaging, and transfer. This speeds up order processing, eliminates physical difficulties, and frees up time for higher-value activities (Edwards, 2022).

Package, Ship, and Refurbish Product
By making it simpler for consumers to package, transport, and refurbish their products, Nike is revolutionizing the supply chain sector. To make it simpler for customers to return Nike things they have ordered online, the business is collaborating with UPS. Presently, customers may drop off their Nike merchandise at UPS stores and have them transported back to Nike at no additional cost. To make it simpler for customers to recycle their old Nike gear, Nike is now collaborating with Best Buy. The recycling of used Nike products is now free for customers who drop them off at Best Buy shops (Johnston,2021).

Nike's Green Supply Chain
Nike is revolutionizing how its products are manufactured through technology, labor, and sustainable innovation as part of its Manufacturing Revolution Project. Nike is concentrating on developing technology-driven production through more environmentally friendly factories that put highly qualified, engaged, and valued employees at the core in order to offer new product innovation to consumers (McNew,2016).

Nike has established the following targets for sustainable improvement by 2024 as part of its efforts:

• To ensure that there isn't any footwear production waste transferred to a landfill or burned without energy recovery.

• To obtain all of the company's goods from contract manufacturers who adhere to its concept of sustainability.

• To develop products that offer maximum performance with the least amount of negative environmental impact, intending for a 10% decrease in the typical environmental footprint and a general increase in the usage of more sustainable materials.

In addition, by the end of 2025, all owned or operated facilities will use only renewable energy, and more people will be encouraged to do the same as part of an attempt to reduce absolute emissions.

Sustainable Supplier Selection
Nike unveiled their Sustainable Manufacturing and Sourcing Index (SMSI) in 2012; it is a platform that incorporates contract factory ratings for Lean manufacturing, human resource management, health, safety, and the environment. Through this approach, Nike's sourcing decisions take into account financial KPIs as well as environmental and human resource management performance. At the end of 2015, 86% of contract factories were graded bronze or better, according to Nike, indicating that factories are currently progressing toward compliance with its supplier requirements (Kang, 2015).

In fact, Nike is developing an optimized production cycle that minimizes negative effects, eliminates waste, allows talented and motivated people to drive quality and productivity, and is strategically led by managers that appreciate a workforce with the freedom to make their own decisions.

Reducing Carbon Emission
Nike has set a number of goals based on scientific research with the aim of lowering its carbon footprint, building on the aims that the firm didn't quite reach the year prior. They include replacing the high-volume products' materials with low-carbon substitutes; working with independent companies and material suppliers to discover more effective manufacturing and energy source alternatives (Nourse, 2020).

Nike decided against employing aircraft for product delivery and instead chose to use cargo ships. Nike stated that by using this innovative method of product delivery, they were able to save nearly $8 million in a single year. Nike anticipated that this adjustment in shipping would result in a 30% reduction in their carbon footprint by 2020.

Conclusion
Nike has long been the world's top manufacturer of athletic wear, and today they are trying to have the best supply chain in the entire world. It wasn't easy to place seventh for Best Supply Chain. This can be due to their depth of knowledge and expertise in their major supply chain disciplines, including: manufacturing, supplier relations, sustainability, outsourcing, lean methods, and innovation. To overcome the problems provided by Covid-19, Nike enhanced automation and regional diversity within supply chains. Nike would benefit from setting up a strong ERP system to handle the changing business context. The objective of integrating their numerous independent producers into their ERP system should go hand in hand with this effort. Nike would have greater information control and increased production process control due to this integration. If Nike wants to successfully manage the supply chain from the producer to the store, information control is crucial to the company's future success.

References